Spatial correlation between climate change and economic growth in EU

Abstract

Over the past decade, Europe has faced significant challenges due to the increase in net greenhouse gas emissions and the resulting economic losses associated with climate change. This article focuses on a detailed analysis of the trends in such emissions, the economic losses incurred, and the impact of adopted environmental taxation policies. Utilizing data from Eurostat spanning from 2013 to 2021, our study aims to explore the interconnections among these factors, evaluate the effectiveness of implemented fiscal policies in mitigating these impacts, and examine their spatial distribution. Through the application of the Moran's Index, we examined the presence of spatial autocorrelation in the data to identify any significant geographic patterns. Results reveal that there has been a slight decrease in net greenhouse gas emissions across Europe from 2013 to 2021, thanks the efforts to curb them also through environmental taxation policies. The analysis indicates that while environmental taxation policies have been implemented, their effectiveness in reducing emissions and mitigating economic losses varies across regions. Some areas have seen more success in curbing emissions and minimizing economic impacts compared to others.